Automobile Sales in Post-corona China: The Rise of Online Sales with Live Commerce Increasing Its Presence

In China, as consumers tend to refrain from going out due to the corona crisis, automobile sales using live commerce is on the rise. “Live Commerce” is online shopping while watching live streaming. In other words, live commerce is the online version of teleshopping.

Until now, automobile sales have typically been conducted through “4S stores.” The “S” in “4S” refers to Sales, Spare Parts, Service, and Survey. There are 4S stores in various parts of China that are licensed by automobile manufacturers, using the logo of the brand they handle. In recent years, emerging manufacturers have been following the sales practices of Tesla and have been expanding their sales methods by combining directly-managed store sales with online sales.

Online automobile sales in China began in the early 2010’s, using automakers’ websites, e-commerce websites and smartphone apps. Initially, many people were skeptical about how much it would lead to sales because online sites only provided basic information such as car specifications, and it was not possible to test drive or negotiate prices.

In 2020, due to the outbreak of the new coronavirus, automobile sales at physical stores fell sharply due to consumers’ reluctance to go out. Dealers and automakers attracted attention to live commerce automobile sales through e-commerce websites (Alibaba’s Taobao etc.), popular social network apps (TikTok etc.) and automobile information websites (Yiche, Souche, Dongchedi etc.). Since automakers and dealers can simultaneously reach large number of people through live commerce, cost performance is high. There are different approaches of live commerce such as a salesperson introduces a model at a dealership or several commentators talk about a model in a studio. During the live streaming, there are benefits such as being able to purchase products at a price lower than the regular selling price, inspiring consumers to purchase.

Another distinctive feature of this type of shopping is that it enables two-way communication between viewers and sellers, which is different from teleshopping. During live streaming, two-way communication, such as commentators answering viewers’ questions on the spot, attracts people.